When it comes to expanding your real estate portfolio, finding the right source of capital is key to being able to make purchases when you find properties that meet your criteria. There are several different financing options available, the most traditional being taking out a mortgage through a conventional bank or credit union. However, those options are often closed off to new real estate developers or those who are just starting to build their real estate portfolio.
Conventional lending may also limit the types of properties that you can purchase, choosing not to fund specific properties or areas based on their underwriting criteria. Before you assume that there are no further financing options available outside of the conventional ones, here are 3 reasons why funding real estate deals with hard money provided by private lenders in San Diego, CA, is a good idea.
Hard Money Loans Are Equity-Based
One of the biggest considerations in receiving conventional funding is based on your credit score and payment history, both personally and as a business. If you have recently made several real estate purchases, then that will negatively impact your credit score, making it harder to receive additional financing.
On the other hand, private lenders in San Diego, CA, are less concerned with credit scores and more concerned with the equity available in the property itself. While these private lenders do look at adjusted gross income, credit scores, and employment history, these are not typically the deciding factors for whether or not you will receive the loan.
Get a Fast Decision
In many cases, conventional funding takes a longer period of time before you can get a decision. That long wait period can negatively impact your ability to close a deal or delay the process of adding real estate to your portfolio. Private lenders in San Diego, CA, can work with you and often get you a decision within just a few hours. That can make your offer on a property stronger than someone who might be waiting on more traditional financing.
Plus, once you get your decision, you can have funds deposited quickly. That makes it a way to quickly access funding and thus be in a position to make strong offers on properties that meet your criteria.
No Prepayment Penalties
Another benefit that private lenders in San Diego, CA, can offer is no prepayment penalties if you pay off the loan early. That means if you decide to refinance at a later date, you can pay off the private lenders without additional fees. These private lenders in San Diego, CA, work specifically to finance California properties only. Plus, there are no requirements for the owner to live in the property, making it a viable financing option for those looking to build a real estate portfolio.
If you are looking to build a financing option to grow your real estate business portfolio, then our private lenders could be the right option for you. Contact us today to get a confidential quote and to learn more about the financing options available.
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